'Poor screening': KBA under fire after stating all 12 Korean exchanges are safe

12 Jul, 2018
by Jelmer van der Dussen
'Poor screening': KBA under fire after stating all 12 Korean exchanges are safe

The Korea Blockchain Association (KBA) is receiving some severe criticism today for their 'poor screening of cryptocurrency exchanges' in South Korea, according to a report of the Korea Times.

Yesterday the KBA announced on a press conference that the 12 domestic crypto exchanges, including well-known exchanges such as Bithumb, Upbit and Coinone, are all safe and secure, and that they all have passed the self-regulatory standards. This despite the fact that a few of these exchanges have recently suffered cyberattacks, with one of the most recent examples the $31.5 million Bithumb hack.

A day after the press conference, the KBA is under fire with other institutions stating that the screening of the exchanges was 'poor'. One of the reasons for the criticism is that the KBA did not share a detailed score or rating of each exchange. According to the KBA, these details 'could trigger another cyberattack'.

Kim Yong-dae, Korea Advanced Institute of Science and Technology professor, thinks these ratings should be made public: "There are variations in the level of security between domestic exchanges. Some crypto exchanges are doing okay. But I believe other exchanges should invest more in their security systems."

There is also criticism on the KBA for extending the one-month inspection to two months. The official reason for this was that exchanges could prepare themselves for the regulations, but others are saying this goes against the purpose of the inspection.

KBA Chairman Jeon Ha-jin achknowledges in the Korea Times report that the inspection is not a 100% guarantee that all exchanges are safe and secure. "This inspection does not guarantee the absolute safety of the 12 exchanges. The result indicates the 12 exchanges satisfy the minimum requirement for their operations. It is like a driver's license. It is hard to tell whether they are good drivers or not."

The KBA is a self-regulating association for local blockchain companies. In the association are also firms that run the largest exchanges, such as Bithumb. The inspection was the result of the arrests of CEOs and executives of Korean exchanges in April. They were arrested on charges of embezzlement and fraud.

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